Citing restrictions on short selling, credit and liquidity as drains on hedge funds in September, as many decided, instead, to sit on significant cash balances, Hennessee Groups performance report for the month the average funds performance was the worst in a decade, with funds losing between 5% and 9%.
Putting a positive spin on the situation, Hennessee Managing Principal Charles Gradante said: This could be one of the best buying opportunities for hedge funds in a decade. Funds performed as expected, as they outperformed the broad equity markets on a relative basis.
Hennessee Group, nonetheless, said the outlook for hedge funds is positive as the market dislocation should provide significant opportunities as markets return to fundamentals.
Separately, Lipper Tass released its second quarter hedge fund performance report, showing the average fund returning 2.58%.